Price Reductions Unchanged as Sellers Wait

Trulia.com, smart real estate search to help you make better decisions, recently announced that 22% of listings currently on the market in the United States as of June 1, 2010 experienced at least one price reduction, which is a slight decrease from 23.6% in June 2009. The total dollar amount slashed from home prices was $26.7 billion and the average discount for price-reduced homes continued to hold at 10% off of the original listing price.

“Sellers are optimistic heading into the summer season because of the strong sales figures from the spring. The spring sales were fueled by the expiration of the tax credit and my concern is that this heavy activity is providing sellers with a false state of optimism,” said Pete Flint, co-founder and CEO of Trulia. “We are already starting to see rising inventory levels and I believe this will be the story of the summer. For the unforeseen future, buyers will continue to have the negotiating power and I expect we will see sellers get aggressive via price cuts throughout the summer.”

Biggest Winners and Losers
Cities in the Western U.S. experienced the largest decreases in price reductions compared to the previous year. Las Vegas, NV led the way with a 67% decrease and six California cities saw a decrease in price reductions of 24% or more, including Oakland, San Jose, Los Angeles, Sacramento, San Francisco and San Diego.

On the other end of the spectrum, cities in the Midwest and South experienced some of the largest percentage increases in price reductions in year-over-year comparison. Kansas City, MO jumped 55% from June 2009 to June 2010, while other cities such as Arlington, TX, Cleveland, OH, Louisville, KY and Houston, TX all saw increases in price reductions of 30% or more.

A Class of Its Own
For the second month in a row, Minneapolis, MN saw 40% of its listings reduced in price. No other city has reached this mark since Trulia started tracking home price reductions in April 2009. With an average discount for price-reduced homes at 8%, the city’s total dollar amount slashed from home prices was $26.4 million.

Luxury Market Holds Steady Post Tax Credit Incentive
Price reduction levels for luxury homes (those listed at $2 million and above) continue to hold steady with 21% of homes seeing a price reduction and with an average reduction of 14%. Homes in this category account for the less than 2% of total inventory but account for almost 25% of total dollars slashed off all the homes for sale.

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